ATLANTA Consumers seem to be getting hungry.
According to new data from Atlanta-based RBC Capital Markets, fewer consumers plan to cut back on restaurant spending in the next three months and a larger number of consumers than in previous months actually plan to spend more at restaurants.
In RBC’s April survey of 2,717 consumers, 44 percent of the respondents said they were planning to spend less at restaurants during the next 90 days, an improvement from the 50-percent reading in March. The percentage of consumers that said they were planning to spend more at restaurants rose to 6 percent in April, from 5 percent in March.
“The stabilization [and] improvement in confidence and restaurant spending intentions support the notion we’re nearing an inflection point in consumer spending,” said RBC analyst Larry Miller. “We are seeing an improvement in spending plans over the last several months after a year of declining spending intentions.”
Even more, when the economy does improve, 44 percent of the respondents said they would spend more money on dining out and everyday entertainment, second only to 48 percent of the respondents who said they would spend more on travel. Others said they would increase spending on household repairs or improvements (36 percent), consumer electronics (30 percent), durable good for homes (30 percent) and automobiles (22 percent).
The investment bank’s April survey also showed the first year-over-year improvement since April 2007 in the CASH Consumer Confidence Index, which measures consumer viewpoints on the current economy, expectations for the future and feelings on job security and their personal financial situations. The index rose to 38.3 from 8.2 in March, and was driven by consumer optimism about how the economy will improve during the next six months. Consumers had registered pessimistic responses related to the future economic outlook almost each month since January 2008. The CASH index had declined steadily nearly each month since September 2007, when it registered above 70, and it bottomed out at nearly 0 in February.
The survey, released Wednesday, is the latest data suggesting a shift toward more optimist outlooks. Evidence released this week from The Conference Board, a New York-based research group, said the worst of the job cuts could be over and that chief executives are less pessimistic about the future performances of their respective industries.
In the restaurant industry, this week brought news and commentary from officials at Benihana, Brinker International, California Pizza Kitchen and Ruby Tuesday indicating that sales trends have improved from the weak winter months and that instituted cost controls have started to pay dividends.
While sources still refer to the operating environment as one of the toughest ever, a positive outlook seems to be building.
“While it would be premature to suggest that a full economic recovery is imminent,” said Benihana chief executive Richard C. Stockinet, "we believe that overall guest counts are beginning to stabilize, and are more hopeful that trends could improve from these levels as we move into [the company’s April-beginning fiscal 2010].”